Forex: EUR/JPY erases gains back to 119.75

FXstreet.com (Barcelona) - Investors are cautious ahead of the BoJ and despite some movement, from 119.46 low to 120.18 high, the EUR/JPY is biased to a flat trading today and fell back to the opening price of 119.75. The entrance of the US market may change the mood as the economic calendar will provide the update of the ADP employment in March, which may be used as an indication for tomorrow’s nonfarm payrolls. The ISM non-manufacturing PMI in March is also due today. The economic calendar released the preliminary report of EMU CPI in March, coming in at 1.7% from 1.8%, as expected.

Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ, said that the decision from the BOJ will be key and certainly notable steps will have to be taken in order to meet current high expectations, and that is crucial for the direction of the yen that Japanese investors respond by exporting capital into foreign markets, or accepting greater foreign currency risk through a reduction in current hedge ratios.

“The EUR/JPY has broken the support at 120.08. Monitor the support at 118.73 (25/02/2013 low). Hourly resistances can be found at 120.26 (intraday high) and 120.95 (28/03/2013 high)”, wrote MIG Bank analysts Bijoy Kar and Luc Luyet.